Following the Money

FOR 18-year-old consumers, financial decisions escalate exponentially. Tall latte or a grande splurge? Lucky Brand or True Religion? State U. or N.Y.U.? Statistics or psych or maybe social work?

It’s not hard for a student today, facing an average single-year college bill of $21,657, to unwittingly take on a life-altering amount of debt. Pick a college or field that doesn’t set you up for a job that’s lucrative enough to pay back loans and you could spend years just scraping by.

To help students make informed decisions about whether it’s worth paying a premium for a certain college or degree, advocates and entrepreneurs have created online tools to compare graduates’ income.

“In the last few years, there’s been a fairly strong push to have colleges report to students when they pick a major what the labor market performance has been,” said Anthony P. Carnevale, director of the Georgetown University Center on Education and the Workforce. “Do graduates get a job in their field, earn enough money to pay their loans?”

Most colleges don’t have the research staff, or desire, to chase down graduates and find out what they’re making. But states have been collecting income data for years, and some — Virginia, Maryland, Nevada and Florida — have passed laws requiring their education departments to compile and release it, or post it voluntarily. Other free sites help students calculate R.O.I., or return on investment: the cost of attending set against future earnings.

Unfortunately, not one of these tools is based on complete or particularly good data. And no site allows students to do what most probably want to do: pick a handful of colleges across the country and compare earnings achieved by graduates in various majors.

The institution most obviously suited to reporting what students earn after college is the federal government. The United States Department of Education already collects graduation data from all states, and the Internal Revenue Service tracks earnings. But the law prevents matching individuals’ transcript information to employment data. A bill introduced in the Senate, the Student Right to Know Before You Go Act, is seeking to overturn that ban. It wants the government to publish earnings and employment metrics sorted by major, degree, college and state up to 15 years after graduation.

While the predictive value of currently available salary tools is limited, they can reveal patterns that might inspire students to consider different choices. Earnings data show that “two-year technical degrees from community colleges can be incredibly valuable,” said Mark Schneider, president of College Measures, which developed a tool, with funds from the Lumina Foundation, that some states are using to compare incomes. For example, Texas students with two-year technical degrees have average first-year median earnings of about $50,000 — $11,000 more than graduates with bachelor’s degrees. In Colorado, students with associate degrees in applied science earn a starting salary almost $7,000 more, on average, than that of graduates with B.A.’s.“So if you’re on the fence about getting a bachelor’s degree,” Mr. Schneider said, “these technical degrees are something you should explore.”

Another takeaway: “You want to go to the flagship public college because it has a better football team,” Mr. Schneider said. “But in every state we’ve worked in, many students graduating from the regional campuses end up just as well off. Sometimes they even beat them.” Health profession majors at the University of Tennessee’s flagship in Knoxville, for example, fall behind those at the Martin campus, $46,770 to $58,592.

Of course, there are factors to consider besides earnings when picking a career or college. But middle- and low-income students who can’t afford to make mistakes, and students considering low-paying professions like social work or art, may want to figure in R.O.I. “The qualitative benefits of college, such as how fun the dorm life is, are temporary,” said Katie Bardaro, lead economist for PayScale, a Web site that reports compensation. “Your after-graduation earnings are permanent.”

PAYSCALE

At PayScale.com, students can compare earnings for graduates of 1,058 colleges and universities as well as national median starting and midcareer salaries for 130 majors. Who knew: The starting salary in nursing beats business $54,100 to $41,400. More useful, the gap narrows midcareer: $70,200 to $70,000. Data can be sorted by region or type of school, including public, private or, as defined by the Princeton Review, party school. (Lowest-paid partiers come from the University of Mississippi; highest from the University of Illinois, Urbana-Champaign.) And using its own algorithm, PayScale calculates return on investment for colleges and popular majors. It may surprise that in-state engineering majors from George Mason University enjoy a higher R.O.I. over 30 years ($1,937,000) than engineers do from M.I.T. ($1,794,000). PayScale also publishes an attention-grabbing list of schools offering the worst returns.

Strengths: PayScale provides median midcareer salaries (10 years plus), which is a more realistic measure of how much liberal arts degrees pay off, since degree holders often work at coffee shops in the early years.

Weaknesses: Earnings are self-reported. Because the compensation survey is completed by PayScale.com visitors (1.5 million did so last year), results are biased toward workers who are researching salaries online — younger, white collar and not yet running Fortune 500 companies. The reports also exclude graduates who went on for an advanced degree and who attended college part time.

STATE BY STATE

Arkansas, Tennessee, Virginia, Colorado and Texas post first-year earnings for graduates of all their two- and four-year public institutions on CollegeMeasures.org. Virginia and Colorado also track private colleges. A math geek who wants to study and work in Virginia can home in on average earnings for computer science majors at the University of Virginia ($59,739), William & Mary ($56,809) and Virginia Polytechnic Institute ($54,917), or compare U.Va.’s computer science majors to its math majors ($45,777) and mechanical engineers ($50,917). Or zoom out to see which schools graduate the highest earners in general; in Virginia, it’s Jefferson College of Health Sciences followed by University of Richmond.

Strengths: Statistics are based on state education and employment records, so the experience of every single public-school graduate who works in the state is factored in. Earnings are available for just about every degree and certificate program in each state.

Weaknesses: Nothing from outside the state, including graduates who take jobs elsewhere, is calculated in. Neither are the self-employed.

COLLEGE REALITY CHECK

Produced by The Chronicle of Higher Education with money from the Bill and Melinda Gates Foundation, CollegeRealityCheck.com allows students to compare earnings, monthly payments on student loans, graduation rates and average net price for up to five colleges at a time.

Strengths: There’s a lot of guidance on what terms like net price actually mean and how to interpret different types of data, along with links to relevant sites and articles. A stylish interface generates graphics like what a graduate’s monthly debt payments might look like over 10 years compared with monthly pay depending on the school attended.

Weaknesses: Earnings figures come from PayScale (see above). There’s no information at all on specific programs.

HOW TO LOOK AT ALL THE DATA

• Focus on figures for different majors rather than different colleges, said Anthony P. Carnevale, director of Georgetown’s Center on Education and the Workforce. “What really matters in your career is much less the college and much more the major. If you go to Harvard and become a schoolteacher, you won’t make more than other schoolteachers.”

• Look at the sample size on which an average or median salary is based, said James Leipold, executive director of the National Association for Law Placement, which has reported on lawyers’ salaries for decades. “The bigger the number, the better the data.”

• Don’t assume you’ll end up in the top half of the earnings median; half the population is below it. Students “always sort themselves to the high side,” Mr. Leipold said. “That’s why they borrow more than they can afford. There’s such optimism about success.”